As negotiations at the UN Climate Change Conference in Bonn and the exploratory talks in Berlin on forming a new government are being concluded, Ottmar Edenhofer, Chief Economist of the Potsdam Institute for Climate Impacts Research (PIK) and Director of the Mercator Research Institute on Global Commons and Climate Change (MCC), emphasises that the world must get out of coal, and reform emissions trading and energy taxes
The world is in a coal trap – and the UN Climate Change Conference has not changed that. The coal trap looks like this: from one side we are being pressurised by the sheer mass of available coal which is cheap in price, but the world will have to pay for it dearly in terms of climate risks, health threats and damages to our economies. Because from the other side, the emissions of this dirtiest of all fuels are pushing onto us. Humankind must free itself from this coal trap if it wants to limit the costs of climate change.
Three things can help: first, the dialogue process launched at the conference and referred to as Talanoa in Fiji must not only aim to improve greenhouse gas reduction targets, but bring forward tangible policies to achieve these targets. Secondly, we need effective pricing of CO2 worldwide; pioneers such as the EU must start with a minimum price in 2018. Thirdly, Germany should change its energy taxation in a socially responsible manner during this parliamentary term of the Bundestag. Currently, clean electricity and gas which is at least not that climate-damaging are being taxed at a higher rate than dirty lignite, which is absurd from the perspective of economic research.
The results of coalition talks must be measured against this – we simply have to get out of coal, we need to reform emissions trading and energy taxes. In the end, this is what serves our economy best. Rebuilding our energy system offers enormous opportunities for modernisation. From power generation from sun and wind, to smarter power grids and storage, to households, it’s all about the digitalisation that has been called for by so many.